Millions of benefits claimants who get jobs are back on dole in six months

Wednesday 27 February 2008 10:22 BST

Work and Pensions Secretary, James Purnell: Private firms are to be given incentives to get the jobless back to work

Four out of ten unemployment benefit claimants who get jobs are back on the dole within six months, a scathing report from MPs reveals today.

The findings will fuel concern that the Government's flagship back-to-work programmes have become little more than an expensive "revolving door", with hundreds of thousands going straight back on to benefits.

They came as the Conservatives claimed the Government had admitted that nine out of ten claimants of its new incapacity benefit would actually be able to work.

Parliamentary answers showed ministers expect 90 per cent of those who will claim employment and support allowance to be capable of some "work-focused activity".

Controversy over the figures threatened to overshadow an announcement by Work and Pensions Secretary James Purnell today that private firms are to be given incentives to get the jobless back to work.

Mr Purnell will say that contractors will be rewarded for getting them into jobs that last at least six months, possibly increasing to 18 months.

"I will set high expectations, with payment on results," he will add.

But Opposition MPs said it was the 29th time the Government had announced the same package of welfare measures since Gordon Brown became Prime Minister last summer.

The scale of the challenge facing ministers is underlined by today's report from the Commons public accounts committee, which found that more than two-thirds of the 2.4million Jobseeker's Allowance claims made each year are repeat claims.

While some turnover is a natural feature of the labour market, around 40 per cent of those moving from Jobseeker's Allowance into work will end up back on the benefit within six months, it said.

Conservative MP Edward Leigh, who chairs the crossparty committee, said: "Far too many people bounce back and forth between short-term employment and being on benefits.

"It becomes extremely difficult for individuals in this situation to find the enduring jobs which can raise them and their families out of poverty.

"Those most likely to be in this position tend to have the lowest skills and the jobs they move into tend to be the least likely to provide any training. Improving their skills will increase their chances of securing jobs that last."

Tory work and pensions spokesman Chris Grayling said the Government's claims to be getting tough on welfare were further undermined by the admission that as many as 90 per cent of claimants of the new incapacity benefit could work.

Labour's welfare adviser, David Freud, has said previously that nearly 2million of the existing 2.6million claimants could go back to a job.

But a Parliamentary answer gave the first indication of the proportion of new claimants ministers estimate could do so.

The new employment and support allowance will replace incapacity benefit for new claimants in October.

Claimants will be divided into two groups. Those exempt from "work focused activity" will receive the support element, worth more than the current top-rate benefit.

Those who are deemed capable of work will get less and move on to the employment element, where they will be required to take part in back-to-work schemes.

Of 567,000 people Labour expects to make a claim for ESA in 2008/2009, 510,000 are expected to claim the employment part of the allowance and only 56,700 the support allowance. Existing incapacity benefits claimants will continue to receive this benefit.

Mr Grayling said: "Gordon Brown and his ministers keep making welfare announcements which are clearly designed to suggest that they are stealing Conservative clothes and getting tough on welfare.

"But every time, when you actually read the small print, you discover that there's very little new in these announcements, and that they aren't getting to grips with the real problem.

"That's why these figures on incapacity benefit are so shocking. They clearly know there is a problem - but aren't doing anything about it."

A spokesman for Mr Purnell said the Tories had "completely misunderstood" the point of the new allowance.

"We want to get 1.5million people off incapacity benefits by 2015 and that is precisely the reason why everyone coming onto the new benefit will be assessed on what work they can do," she added.